Political and policy discourse in India and the US point to different futures

Consider, first, developments in India. In addition to Digital India workshops being organised in 120 universities, covering 2,400 colleges and 30,000 students, Infosys co-founder, Kris Gopalakrishnan, recently turned in an ambitious report on how to realise the Digital India programme. Google has set a digital locomotive in motion by announcing plans to build on its initial success in creating WiFi hotspots around railway stations, in partnership with the telecom arm of Indian Railways. The World Economic Forum’s India Economic Summit focused on the theme of “fostering an inclusive India through digital transformation”. Digitalism seems at the epicentre of India’s policy narrative. Even if it is still just talk, committee reports and grand programmes, at least there is talk.

By contrast, in the US, a presidential election season is in full swing. The candidates are outspoken on many issues; yet, there is a noticeable coyness about mentioning the d-word, except in a negative context. One candidate’s email habits are the subject of plenty of nasty campaigning, for which the other candidate leans heavily on a hyperactive Twitter account. Both candidates agree on the importance of tackling the threat posed by — what the second candidate refers to as — “the cyber”.

Ignoring the d-word has severe consequences. Consider a few ways in which the d-word makes a profound difference in the US economy. The rise of the so-called “gig economy” is reshaping how many workers think about jobs. According to a study by Harvard’s Lawrence Katz and Princeton’s Alan Krueger, all net new jobs created in the US since 2005 are due to this phenomenon. More and more workers are contractors or freelancers and are increasingly relying on digital intermediaries to do their work. The d-word is closely tied to how jobs are being created.Even as the internet creates jobs, it makes other jobs obsolete. Erik Brynjolfsson and Andrew McAfee at MIT have been arguing that advances in digital technology and its applications to automation — from improved industrial robotics to automated translation services — explain the slow employment growth of recent years, and the situation will only get worse.

Even as the internet creates jobs, it makes other jobs obsolete. Erik Brynjolfsson and Andrew McAfee at MIT have been arguing that advances in digital technology and its applications to automation — from improved industrial robotics to automated translation services — explain the slow employment growth of recent years, and the situation will only get worse.

Consider some sobering analysis from a 2011 McKinsey study, based on an analysis of over 750 occupations. If you are a bookkeeping accounting or auditing clerk, there is an 86 per cent chance of your job being automated with current technology — and there are 1.6 million such workers; as a stock clerk and order filler, there is an 85 per cent chance of your work could be automated now — and there are 1.8 million such workers; as a food preparation and serving worker, including fast food, there is a 74 per cent chance of job being automated — and there are three million such workers. Until now the jobs at risk fell into very specific lower-level categories; with artificial intelligence, big data, sensor technologies, driverless cars, advanced robotics and 3D printing, among other offshoots of digital technology, more sophisticated tasks will be next.

The changes cited above are going to continue to exacerbate inequalities. The value associated with digital industries accrues to the owners of capital and the highest-skilled workers. Over the past three decades, labour’s share of output has shrunk globally from 64 per cent to 59 per cent. Access to the digital infrastructure is now a critical factor in determining access to opportunities for moving up the income ladder, productivity and access to essential services. According to The White House statistics, in 2015, one in four Americans did not have internet access at home; Hispanic, Black and Native American households trail White households in internet adoption by more than 10 per cent; overall, older, less educated, lower income, and rural households have fewer choices and slower internet connections, setting up a vicious cycle and deepening a digital disparity.

Much of the American election rhetoric has focused on the ongoing competitiveness and trade agreements with other countries, notably China, as well as those associated with the Trans Pacific Partnership. It turns out that China is mounting an even more profound competitive threat on the digital front. According to the Digital Evolution Index that we developed at The Fletcher School, China is leading the world in digital momentum, while the US is ranked 30th out of the 50 countries studied. Of late, it is China, not Silicon Valley, that is taking the lead in developing mobile technologies. “Quite frankly, the trope that China copies the US hasn’t been true for years, and in mobile it’s the opposite: The US often copies China,” according to Ben Thompson, the founder of the tech research firm, Stratechery, quoted in The New York Times. As for the manufacturing advantage that often propels China to the forefront, there is a new — digitally led — frontier emerging that will continue to drive a competitiveness wedge between the US and China. While, there are still only 36 robots per 10,000 manufacturing workers in China, Beijing has set a goal of raising the robot-to-worker ratio to more than 100 by 2020.

The Chinese government’s “Made in China 2025” initiative provides manufacturers with hundreds of billions of dollars worth of resources for technological upgrades, including advanced machinery and robots. This will add to a compounding of the job creation challenge in the US as Chinese manufacturing renews its global competitiveness.

The World Bank proposes investing in the “analog complements” of the digital economy, including adapting skills to get the most out of the digital revolution. It has also argued that governments ought to facilitate innovation and strengthen education and skill building. It is even more essential now to invest in an education system that fosters the critical thinking, humanistic and creative skills that set them apart from automated and AI systems. Digital technologies, from computers to MOOCs to interactive games, can help reinvent public education.

Why, you may ask, do American politicians run campaigns as if they are frozen in the early 20th century, and not acknowledge the post-internet realities? The answer is simple: Ohio (and other so-called political “battleground” states). Battleground states are also places that have suffered the greatest decline in jobs because of the loss of the manufacturing industries to overseas competitors. Elections are won or lost on the basis of who wins these states. These states are far from the digital ghettos of Silicon Valley or Boston.

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(This article first appeared in the print edition under the headline ‘Two digital worlds’)